Mondragon Corporation is likely the largest cooperative, comparable to a multinational conglomerate:
http://tomallan.net/2012/06/07/mondragon-a-corporation-owned-by-the-workers/
I’ve spent most of the last week recording interviews in Mondragon in the Basque Country, Northern Spain, for a radio piece for Making Contact. Mondragon Corporation is probably unique, not just in its size – it has over 83,000 workers in over 250 companies – but in its structure. It is actually a network of worker owned co-operatives, linked by a complex set of rules that sees them sharing profits, pooling financial and technical resources, and
democratic decision making.
It was founded by a visionary priest, father José María Arizmendiarrieta, who arrived in the town of Mondragon shortly after the end of the Spanish Civil War to find a town divided and impoverished by the conflict. He set up a technical college, believing that education and the creation of jobs where the workers were also owners was the key to transforming the fortunes of the town.
The result was the creation of not just one co-operative, but ultimately hundreds. The key decision to create their own savings bank, Caja Laboral, allowed the first cooperatives to generate their own finance, and to expand, creating new cooperatives and purchasing other businesses. Today, the corporation’s businesses include a bewildering array of activities; white goods, elevators, car parts, a supermarket chain, a bank, research centres, and even a rabbit farm (which I visited on Tuesday.)
One of the most impressive aspects to the corporation is the way in which it has been able to keep its worker/owners employed, whilst Spain currently has the highest unemployment rate in Europe. Part of the reason for this is that the different co-operatives contribute a percentage of their profits into a solidarity fund, which can be accessed by co-operatives when they are making a loss. Another factor is that rather than fire people (and you cannot actually fire a worker/member/owner) the corporation can retrain and move workers from a firm that is performing badly, to another that is doing better.
Finally, because workers are also owners, they are also willing to tighten their belts in the hard times. For example, workers from Fagor, the kitchen and white goods manufacturer that developed out of the very first cooperative, recently voted to cut the wages of everyone working at the company – from managers to those working on the production lines.
That said, Mondragon is not without it’s problems and challenges, and speaking to people from different co-operatives and from the University of Mondragon over the last week has also revealed many questions about the future of this unique business. Above all, there is a concern that the genuine spirit of co-operative culture, of shared decision making, has to be reinforced through training – and there are pressing issues, such as the number of workers in factories abroad who are not cooperative members.
But to find out how they intend to tackle these issues, and to hear from the people there, you’ll have to wait for my radio piece for Making Contact. I’ll be editing the piece later this month, once I’m back from Spain – I’ll let you know on the blog when the broadcast date will be.
____________________________________________________
http://www.managementexchange.com/story/mondragon-cooperative-experience-humanity-work
http://en.wikipedia.org/wiki/Mondragon_Corporation
http://aboutmondragon.tumblr.com/
http://www.mondragon-corporation.com/ENG.aspx?language=en-US
________________________________________
From the 2012 Mondragon Congress—
MONDRAGON confirms the success of its international and innovation strategy

 Date: Monday, June 04, 2012
MONDRAGON Corporation ended 2011 satisfactorily, posting an operating profit of €343m, similar to the figure achieved in 2010, and maintaining the same number of jobs as the previous year.
The co-operative group has presented its results for 2011, a year which, in spite of the prevailing economic situation, it managed to equal the level of sales for the previous year (€13.97bn), practically keep employment at the same level (83,569 people, with a slight contraction of 0.1% compared to the previous year) and post consolidated profits totalling €125m, less than those for last year but double those for 2009, the worst year of the crisis.
€3.97bn in international sales for the Industry Area was an historic record for the group, exceeding the sales turnover posted in the years before the crisis.
20.5% of the Industry Area’s sales in 2011 were new products and services that did not exist five years ago.
MONDRAGON earmarked €165m for R&D&i in 2011, has 508 invention patent families and is participating in 39 projects of an international nature.
These results were due mainly to the diversity of what MONDRAGON's businesses offer, to its increasingly growing presence in international markets; and to its firm commitment to innovation, which made it possible for 20.5% of the Industry Area's sales in 2011 to be new products and services, which did not exist five years ago.
Internationalisation and innovation
One of the key elements to MONDRAGON's development in 2011 has been its international strategy, which has already made the group a benchmark with commercial and production set-ups on the five continents.
With regard to this presence in foreign markets, in 2011 an historic record was set in terms of the Industry Area's international sales which totalled €3.97bn, 10.25% up on 2010. As a result, this meant that international sales accounted for 67% of total sales in 2011, an increase of 4 percentage points compared to 2010. Taking a longer-term view, from 2009 to 2011, international sales have seen significant growth of 25%, and have increased by close to 9 percentage points in relation to total sales.
Likewise, MONDRAGON's workers abroad now number more than 15,000 people.
The international nature of MONDRAGON's industrial activities is increasingly clear, and corroborates the thesis defended in the group whereby multi-location is an ideal strategy for defending jobs in the co-operative enterprises located in our region. The network of set-ups abroad has undergone significant growth to total 94 subsidiaries (17 more than last year), with a consolidated presence in Europe and emerging countries like China, Brazil, India and Russia. In this regard, it is worth highlighting the new business projects of FPK in Brazil and Germany, Cikautxo in China and India, Maier in India, and Orona in France, Belgium and Luxemburg.
As for investment, this has risen to €335m in the Industry Area. €165m was earmarked for investment in R&D&i, which indicates how important innovation is for the group. The Corporation, which has 508 families of invention patents, is taking part in 39 international R&D projects in sectors like aeronautics, energy, ICTs or nanotechnologies. In this area it is important to highlight the contribution ofMondragón Unibertsitatea, which in 2011 started up its Faculty of Gastronomic Sciences with the inauguration of the Basque Culinary Center, the Corporation's network of technology centres, made up of 14 centres, and the innovative work of the co-operatives themselves. Special mention should go to Orona IDEO, an innovative project at the European level to design the accessibility and mobility systems of the future and which will be a benchmark urban space that will facilitate interaction between technology centres, university and companies.
As far as the development of new businesses is concerned, new steps were taken in 2011 to set up new activities, among which stand out the Lotus Range Extender (an eco-engine aimed at the automotive sector) or new businesses linked to the MONDRAGON Health platform (Kiro Robotics, which will develop high-technological-content equipment for the pharmaceutical sector; or SHS, for purchasing and supply logistics for hospitals).
In the Retail Area, turnover accounted for €8bn, with a slight contraction of 2.9% compared to 2010. In a year characterised once again by sluggishness in consumer spending, important steps have been taken to reduce bank debt, process efficiency has been improved, and the commitment to offer competitive prices has been maintained, with lower margins backed by recognised quality combining own brands and leading manufacturer brands.
For its part, in the Finance Area, in a difficult climate for the sector, MONDRAGON's institutions got through the year satisfactorily based on measures to improve the efficiency of their businesses. The significant effort made by Caja Laboral in terms of transfers to provisions is behind the final Net Profit posted of €19.4m. As for business strategy, Caja Laboral acquired 100% of the capital of the insurance firms Lagun Aro SA and Lagun Aro Vida SA, in order to deploy a new more integrated Banking-insurance strategy.
As the President of MONDRAGON's General Council José María Aldecoa declared, "in 2011, in spite of the circumstances we gave a new, significant boost to internationalisation, we have accessed new markets, we have promoted innovation, and we have repositioned some of our businesses. And this has all been done whilst maintaining the level of employment of the previous year and operating profits equivalent to 2010. Therefore, the assessment of the year in overall terms has to be positive".
Mr Aldecoa also pointed out the importance of the approval in 2011 of MONDRAGON's Socio-business Policy for the period 2013-2016. "It is a milestone that marks the path to follow over the next few years and on which we are already working to transform our businesses based on five strategies: Sizing, Internationalisation, Innovation, Inter-cooperation and Commitment and ...
Sanders - legislation
26 Jul '12 20:01
Back to Top